Marketing

Customer (or market) sales force structure

organizes its sales force among customer or industry lines. Can help company build closer relationships with each different kind of customer, helpful for b2b when selling large quantities to one customer need more attention

Vertical price fixing

retailers cannot be forced to adhere to minimum retail prices, manufacturers/wholesalers CAN set a max price if it does not adversely impact competition

Outside vs. Inside Sales force

Outside: salespeople who travel to call on customers in the field Inside: salespeople who conduct business from their offices telephone, the internet or visits from prospective buyers.

STP in a retail setting

So many retailers must define target market specifically and position strongly, Trader joes= cheap gourmet

Experiential retailing

create more than a good but an experience to promote the target market to buy. More time in store= more likely to spend $$ I.E. Cabelas outdoors store but creates a museum or IKEA furniture store that is an experience

Buzz marketing

cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities

Product adaption

adapting a product to meet local conditions or want in foreign markets OREO COOKIE

Horizontal price fixing

illegal to agree on a price within a group of manufactures OR retailers OR wholesalers

Pull strategy

: Pushing products to consumers who ask retailers for them

Team selling

: Using teams of people from sales, marketing, engineering, finance, technical support and even upper management to service large, complex accounts

Direct and Online Marketing:

: direct connections with carefully targeted individuals to both obtain an immediate response and cultivate lasting customer realtionships

Voluntary attention

: personal relevance-> attention. If you want consumers to voluntarly attend to your messages it must contain information that is important and relevant to them

Product sales force structure

: sales people specialize in selling only a portion of the companys products or lines.

Promotion Mix

Advertising, PR, Sales promotion, Personal Selling, Direct and Online Marketing

PR

Building good relations with the company's various publics by obtaining favorable publicity, building a good corporate image and handling or heading off unfavorable rumors, stories and events. "Free media attention" Consumers-> more skeptical PR-> more important

Joint Venturing

Entering foreign markets by joining with foreign companies to produce or market a product or service, licensing, contract manufacturing, or management contracting, or joint ownership

Market Nicher

Ideal market niche is big enough to be profitable with high growth potential and has little interest from competitors, key to market niching is specialization, serves small segments other firms overload car2go

How can marketing negatively impact consumers

Manipulate kids/elderly, pollution, discrimintation, high mark-ups and deceptive practices, unsafe products "big-gulp"

Retail atmospherics

Refers to how managers manipulate the design of the building, interior space, layout of aisles, texture of carpets and walls, scents, colors, shapes and sounds experienced by customers to achieve a certain effect and promote customers to buy Atmosphere-> emotional response-> influences behavior

What is wholesaling?

Whole salers buy mostly from producers and sell mostly to retailers, industrial consumers and other wholesalers. Help manufacturers to reach many small customers at lower cost

Brokers and Agents

Wholesalers who do not take title to goods and perform only a few functions. Usually specialize in customer type or product line Broker:brings buyers and sellers together. Agents: represent buyers or sellers on a more permanent basis.

o Horizontal marketing system:

a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity IE walmart places mcdonalds express in their stores

o Vertical Marketing Systems:

a channel structure in which producers wholesalers and retailers act as a unified system. One channel member owns all of the others, has contacts , or has a sizeable amount of power

Category Killer

a giant specialty store that carries a very deep assortment of a particular line IE best buy, or home depot

Service retailer

a retailer whose product line is actually a service: I.E. hotels, airlines and colleges

Discount store

a store that carries standard merchandise sold at lower prices with lower margins and higher volumes walmart, target, kohls

Off-Price retailer

a store that sells merchandise bought at less-than regular wholesdale prices and sold at less than retails I.E. factory outlets, TJ Maxx and Costco 3 main types: Independent, factory outlets and warehouse clubs

o Contractual VMS

a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts, franchise aprart of this

Adapted marketing

an international marketing approach that adjusts the marketing strategy and mix elements to each international target market which created more costs but hopefully produces a larger market share/return

Standardized global marketing:

an international marketing strategy that basically uses the same marketing strategy and mix in all of the companys international markets

Advertising

any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor, most visible element of IMC, extremely effective at creating awareness and generating interest

Market Challenger

challenge the leader with an aggressive bid for more market share by observing what has made the leader successful and impoving upon it. Pepsi 2 coke

Market Penetration:

companies set a low initial price to penetrate the market quickly and deeply. After gaining large market share economies of scale allow them to continue to lower prices • Market must be highly price sensitive • Economies of scale must be there

• Vertical Conflict:

conflict between different levels of the same channel, more common, IE kfc headquarters want to emphasize grilled chicken over fried chicken.

Product invention

consists of creating something new to meet the needs of consumer in a given country as markets have gone global companies have developed products that meet special needs of low income consumers

Territorial sales force structure

each salesperson is assigned to an exclusive geographic are and sells the compnays full line of products or services to all customers in that territory, clearly defines each sales persons job, creating accountability, limits travel expenses and creates better customer relationships

Exporting

entering foreign markets by selling goods produced in the company's home country with little modification, simplest way but little control or profit potential. Direct and indirect (through an intermediary, less investment)

Price discrimination

guidelines/laws regarding advertising price reductions, advertising prices in relation to competitors prices and bait and switch advertising

IMC

is the concept of designing marketing actives—advertising, public relations, promotion, personal selling, direct and online marketing- In combinations to provide clarity CONSISTENTCY and maximum communication impact across all audiences o I.E. have all mediums of marketing be homogeneous

Straight extension

means marketing a product in a foreign market without making any changes to the product. Take product as is and find customers for it

Predatory Pricing

means that a company sets a very low price for the purpose of driving competitors out of business they will then raise prices when competitors are gone think walmart

Perceptual Maps

o = a graphical representation of how customers perceive brands in a given industry. o Maps ideal brands because they are mapped by consumer survey data also give intel on competitors o Help to plan marketing actions and predict consequences

direct marketing

o A marketing channel without intermediaries, an elemnt of the promotion mix, fastest-growing form of marketing. Low cost, efficient and fast alternative to reach a lot of markets, flexible.

Odd-even pricing

o A psychological pricing tactic in which numeric value is utilized to affect the customers perception of product value o Odd pricing refers to one ending in 1,3,5,7,8 just under a round number o Even pricing refers to a price ending in a whole number or tenths

• Cost-based pricing

o Although costs are an important consideration this is often product drven o Marketing then must convince buyers the product value at that price justifies a purchase o Usually results in disappointing profits

Designing a marketing communications message

o An effective message should get attention, hold interest, arouse desire and obtain action (AIDA model) o Draw a conclusion ot leave it to the audience? Research shows that the advertiser is better off asking questions and letting buyers come to their own conclusions o Should you present strongest message first or last? Presenting first gets strong attention but may lead to anticlimactic ending. o Whther to present one-sided or two-sided arguments one-sided are more effective in sales promotion unless audiences are highly educated or likely to hear opposing claims.

Promotion

o Any communication by marketers that informs, persuades, reminds and builds relationships with potential buyers of a product to influence an opinion or elicit a response

What are the primary ways companies connect with customers online

o Creating a website, placing ads or promotions online, setting up online social networks, using email

How can marketing negatively impact society

o Cultural Pollution: Constant assault of our senses by marketing and advertising. Commericials interrupt serious prgrams , pages of ads cover magazines, billboards mar beautiful scenery, spam fills our emails. Most importantly constant interuptions continually pollute peoples minds with messages of materialism, sex, power and status

5 C's of Marketing

o Customer o Competitors o Collaborators o Context o Company

• Channel conflict

o Disagreements among marketing channel members on goals, roles and rewards who should do what for what rewards?

paid vs. owned vs. earned media

o Earned: social media channel content, blogs , videos, conversations, wikis, feedback, tweets, and ratings attracts FANS o Owned: corporate website, portals attracts CUSTOMERS o Paid: Print advertsing, TV, Web banners, paid search, media deals attracts STRANGERS

Blue ocean strategy

o Finding uncontested market strategy apple long practiced this strategy when it keep innovating new products, create and capture new demans break the value-cost trade off align the whole system of a firms activites in pursuit of differentiation and low cost

Price image

o Firms or retailers may compete more on price image than on proce o Managing through non-price cues or irrelevant price cues o Sale sign or ending in 9

global marketing

o Focuses resources on global market opportunities and threats, main difference is the scope of activities because global marketing occurs in markets outside the organizations home country

How does culture impact marketing strategy?

o Have to understand cultural traditions, preferences and behaviors to avoid embarrassing mistakes and take advantage or cross-cultural business opportunities. o Culture can effect expectations of product characteristics, perception of product benefits, views of morality and ethics

Applying Porters

o Identify the competition: every business has competitors, consider all the alternatives your customers have, what are their strengths and weaknesses? What do you know about their strategy/target? How do you compare with them in services to your target market? How do you compare in terms of value delievered? o Identify Substitutes: anything that a customer might choose over what you have to offer including services or products in the future that might take its place. AVOID MYOPIA identify competitors both at the industry level and the market level. Market= all companies trying to satisfy the same customer need o Consider the power of buyers: buyers have power with some buyers holding more power than others, looking at customer mix in terms of how long they have been with you how much they buy and what level of impact each represents to your company can help focus you activites specifically on attracting and retaining the right customers o Consider the Power of suppliers: suppliers can weild a signifigant amount of power if costs or availability supply suddenly changes, are there supplies that are required for production? What might you do to minimize the potential for risk the loss or mark up of that material? o Consider barriers to entry: every business is at risk of gaining new competitors but some businesses are more immune to those risk than others. How difficult is it for other competitors to emerge?

market vs. industry level competitors

o Industry: beverage industry, computer industry mac v Microsoft, coke v pepsi o Market: competitors trying to satisfy the same need hotel v beach house, weight watchers v gym membership, bookstore v ebooks

intensive vs. selective vs. exclusive

o Intensive: stocking the products in as many places as possible think coveinence goods o Selective: the use of more than one but fewer than all of the intermediaries who are willing to carry the company's products o Limited: giving a limited number of dealers the exclusive right to distribute the company's products in their territories

• PRODUCT, TIME, PLACE UTILITY

o Intermediaries bridge the discrepancy between the assortment of goods produced and demanded reduce search time and delivery time, and reduce distance between consumer and product

What is retailing?

o Involves all activities involved in selling products or services directly to final consumers for their personal nonbusiness use o Many institutions do retailing not just retailers

• Indirect marketing channels

o Involves at least on intermediary o Greatly expand the reach to targeted end users o Builds on the distribution experise of channel partners o Relinquishes control of downstream activities

sales management

o Involves planning, implementing and controlling the personal selling effort of the firm o Must direct, and motivate sales force through sales quotas and positive incentives o Must evaluate sales force and provide good feedback by requiring sales reports, expense reports

• How do channel members add value for the producer?

o Keeps tracks of local conditions and markets o Know how competitors are pricing their products o Know who is in need of your products/services o Knows how t reach and promote to local customers o Provide information on customer needs back to company

Ethics vs. laws

o Laws are societys values and are enforceable in the court system o Ethics are the moral principles and values that govern the actions and decisions of an individual or group

Price-quality relationship

o Most inexperienced consumers use price as an indicator of quality o Price becomes crucial when consumers have little knowledge about certain products/brands

personal selling benefits

o Occurs when a company representative contacts prospect directly regarding a product, critical for many push strategies, more common in B2B and complex products that are expensive and products requiring personal touch o Critical link between customers and the firm, most successful at gaining sale and customer satisfaction o Rich source of market information, Most flexible method of promotion, Most expensive per contact, promotional tool

Basic competitive strategies

o Overall cost leadership: the company works hard to achieve the lowest production and distribution costs. Low cost let its produce lower than its competitors and win a large market share o Differentiation: Here the company concentrates on creating a highly diffentiated product line and marketing program so that it comes across as the class leader in the industry most consumer would prefer to own this brand if its price in not too high o Focus: Here the company focuses its effort on serving a few market segments well rather than going for the whole market. Ritz carlton focuses on the top 5 percent of travelers

What is a price?

o Price is the amount of money charged for a product or service or the sum of all the values that a customer gives up to gain the benefits of a product or service o Only elemtn that produces a revenue o Easy to change o Directly related to revenue generation and quantities sold o Key component of the profit equation

Reference prices

o Prices that buyers carry in their minds and refer to when they look at a given product. When you put marked up brands next to really expensive brand marked up will still sell more

word-of-mouth

o Product information transmitted by individuals to individuals • Perceived as more reliable/trustworthy than traditional marketing • Backed by social pressure to conform with recommendations • Influences approx.. two-thirds of all sales of goods • Especially powerful when unfamiliar with a product category • More likely to occur if product is visible, risky, distinctinve, new or self-image related • NOT having something to say often the problem, brands need to help by setting the topic asking questions and providing examples

steps in the personal selling process

o Prospecting and qualifying (finds qualified potential customers)-> preapproach (researches prospective customer)->approach(meets customer)->presentation and demonstration(sales pitch)->handling objections(clarifies and overcomes any customer objections)->closing (asks customer for order)->follow up(contacts after sale for feedback or leads)

How do channel members add value for the customer?

o Provide time and place utility allow inspection, can get right away o Provide assortment utility ability to compare to other alternatives o Might adapt the product or service o Can return the product or have warranty after the sale service o May be knowledgeable about the product and offer advice and therefore be better at selling the product

Functions of wholesalers

o Selling and promoting: reach many small customers at low cost o Buying and assortment Building: wholesalers can select items and build assortments needed by their customers, thereby saving much work o Bulk Breaking: save customers money by buying big and selling in smaller quantities o Warehousing: hold inventores thereby reducing the inventory cost of suppliers o Transport: provide quicker delivery service to buyers because they are closer than suppliers o Financing: suppliers by ordering early and paying bills on time o Market information: Whole salers give information to suppliers and customers about competitors, new products and price developments o Management services and advice: often help retailers train their sales clerks, improve store layouts and displays

• Competition-based pricing

o Setting prices based on competitors strategies costs, prices and market offerings o Typically intended to capture market share o Risk allowing competition to drive pricing strategy and usually incites price wars

Loss leader pricing

o Setting prices near or below cost in order to attract customers to a store, supermarket features bananas at 20 cents a pound and pampers diapers at 50% off to bring buyers in who then purchase other items

sustainable marketing

o Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs I.E. McDonalds plan to win

Why has business become more global?

o Technology improvements o Free trade agreements o Transportation improvements o Communication improvements o And globalization of culture through mass media

Comparative Advertising

o The comparing brand should have an inferior position in the marketplace o Must have research to back up comparative claims o Also called attack advertising in which a company directly compares its brand with one or more brands think apple pc cool guy/dork commercial o Can result in advertising war think hotdogs/cell phone service companies

• Logistics

o The process of strategically managing the efficient flow and storage of raw materials, in process inventory and finished goods from point or orgin to point of consumption o Sourcing and procurement procuction scheduling order processing inventory control, warehousing and materials handling and transportation

• Price elasticity of demand

o The sensitivity of customer to price changes in terms of the quantities they will buy • Elastic: small percentage changes lead to substantial changes in number of units bought • Inelastic:large percentage changes in price lead to little changes in amount bough IE gasoline

Consumerism

o The set of activities of government business, independent organizations and concerned consumer that are designed to protect the rights of consumers

Porter's Five Forces

o Threat of entrant: The ease with new competitors can enter the market if they see that you are making good profits cause prices to be driven down o Power of supplier: The power of suppliers to drive up the prices of your inputs o Power of buyer: The power if your customers to drive down your prices o Competitive Rivalry: the strength of competition in the industry o Threat of substitutes: the extent to which different products and services can be used instead of your own

The communication process model

o Used to communicate effectively, involves nine elements, Two major parties in communication: Sender and receiver, two major communication tools: message and media and four more major communication functions: encoding, decoding, response and feedback. The last element is noise in the system.

• Demand curves

o Used to estimate demand at each price level inelastic demand curves are relatively steep

• Direct marketing channels

o Useful because they allow maximum control over presentation to the end-user and positioning efforts depends if the seller has the resources to build and sell and if there is a high concentration of geographic buyers.

Value-based pricing

o Uses buyers perceptions of value as the key to pricing o Means that the marketer cannot design a product and marketing program THEN set the price o Pricing must come first

Everyday low pricing vs. high-low pricing

o Wal-Mart keeps prices consistently low, saves search cost of finding lowest overall prices o Department stores keep prices marked up and then have discounts or sales often, provides the thrill of the chase for the lowest price

direct marketing forms

o mail markeintg, catalog marketing, telemarketing or DRTV (infomercials), kiosk, digital direct, online

• Horizontal Conflict

occurs among firms at the same level of the channel IE ford dealers complaing that other ford dealers in same city give poor service and slandering ford name

Involuntary attention

occurs when a consumer is exposed to something surprising or that stands out from surrounding context

o Conventional

one or more independent wholesaler, manufacturer, producer or retailer. Each a spate business seeking to maximize own profts.

Direct Investment

opening manufacturing facilities in a foreign country most control, and profit potential but also most risk

Personal Selling

personal presentation by the firms sales force for the purpose of making sales and building customer relationships, some products require help of salesperson, most expensive, can add significant value as salespeople offer a service as wella s a product

Market Follower

play along with competitors and not rock the boat, adopt or improve on leaders products with less investment, Bring distinct advantages, Must keep costs and prices low or quality and services high mountain dew

Push strategy

pushing products to wholesalers

Sales promotion

short term incentives to encourage the purchase or sale of a product or service can be aimed at both end user consumers of channel members, used in conjunction with other forms of IMC

Market Leader

the firm in an industry with the largest share, usually leads in price changes, new product introductions and promotion spending. Constantly being challenged must not become complacent Want to • expand total demand by findind new uses, new users or more usage of its products • protect market share by fixing weaknesses that provide opportunities for competitots, maintain consistent prices that provide value, keep strong customer relationships and continuous innovation • expand market share by increasing profitability with increasing market share in served markets, producing high-quality products and creating good service experiences by building close relationships

Merchant Wholesalers

the largest single group of wholesalers, can be full service or limited service. An independently owned wholesale business that takes title to the merchandise it handles

By-product pricing

• Setting a price for by-products in order to make the main products price more competitive, animal poo from the zoo -> soil fertilizer

Market skimming

used by companies who invent new products, APPLE, price high then slowing price lower to get each market segment • Market must be hard to penetrate • Demand support high price

Exposure

when a stimulus comes with in range of someone's sensory receptors, must select media that target markets consume to ensure their target is exposed to marketing messages, must break through clutter to grab attention

Manufacturers sales branches and offices

wholesaling operations conducted by sellers or buyers themselves rather than operating through independent wholesalers, Separate offices dedicated to either sales or purchasing

Product bundle pricing

• Combining several products and offering the bundle at a reduced price, IE insurance, cable, wifi

PR Tools

• News • Speeches special events • Social networking • Internet • Buzz marketing • Corporate identity materials • Special events

PR Functions

• Press relations or press agency: creating and placing newsworthy information in the media to attract attention • Product publicity: Publicizing specific products • Public affairs: building and maintaining community relationships • Lobbying: building and communicating company relationships with legislators • Investor relations: maintaining relationships with shareholders and investors • Development: working with donors or members of non-profits

Captive product pricing

• Products that must be used along with the main product. IE razor blade heads with razors, usually make razors cheap and markup the razor heads

Product line pricing

• Setting the price steps between various products in a product line based on cost differences between the products IE, setting prices across an entire product line MARC by marc Jacobs cheaper than marc jacobs

Optional product pricing

• The pricing of optional or accessory products along with a main product; IE cars than can come with leather seats for 3,000 more